Habitação Jovem Credit in Portugal: how to buy your first home

Updated in September 2026

Buying a home in Portugal can seem complicated, especially if you are a first-time buyer and are unsure how much money you need, what requirements you must meet, or where to start.

To make it easier for young people to buy their first home, Portugal currently offers a public guarantee for people aged 35 or under, which can make it possible to finance between 85% and 100% of the property’s transaction value. In addition, eligible young buyers can benefit from significant tax exemptions when purchasing their first home

Under the rules currently in force, the public guarantee applies to credit agreements signed by December 31, 2026 That’s why we’ve prepared this guide where we explain in a simple way how these measures work, what you need, and the steps involved in applying for a home loan in Portugal.

What is Crédito Habitação Jovem?

Although it is commonly referred to as “Crédito Habitação Jovem” or a “100% home loan for young people,” it is not a loan granted directly by the Portuguese government.

The loan is granted by a bank, like any other mortgage. The difference is that the Portuguese State acts as a guarantor for part of the loan, allowing the bank to finance a larger amount than usual.

In certain cases, financing can reach up to 100% of the property’s transaction value. The public guarantee can cover up to 15% of the initially contracted loan amount and remain in effect for a maximum of 10 years.

This can be especially useful for young people who have enough income to afford the monthly mortgage payments, but haven’t yet managed to save enough money for a down payment.

Requirements for Crédito Habitação Jovem in Portugal

To benefit from this measure, certain requirements must be met. The main ones include:

• Being between 18 and 35 years old, inclusive
• Having tax residence in Portugal.
• Purchasing your first home as your primary and permanent residence in Portugal
• Not owning another residential property in Portugal
• Not having previously used this public guarantee.
• Having your tax and Social Security affairs in good standing.
• Not exceeding the income limit corresponding to the 8th Portuguese personal income tax (IRS) bracket
• Purchasing a property whose transaction value does not exceed €450,000
• Apply for the loan through a financial institution participating in the public guarantee scheme

If the property is purchased jointly by several people, all buyers must also be borrowers and must individually meet the eligibility requirements.

The measure is intended exclusively for the purchase of a primary and permanent residence, so it does not apply, for example, to a second home, an investment property intended solely for rental, or a loan exclusively for construction or renovation work.

Financing up to 100%

With a conventional mortgage, the bank typically does not finance the entire purchase price of the property. This means the buyer needs to contribute a portion of the price from their own savings.

With the public guarantee for young people, financing can reach up to 100% of the transaction value considered by the bank, provided the loan application is approved.

For example, if a house costs €200,000 and the bank approves 100% financing, the loan could, in certain circumstances, cover the full €200,000.

However, there is an important detail: financing is calculated using the lower of the purchase price and the bank’s appraisal value.

For example, if you buy a home for €200,000 but the bank appraises it at €190,000, the financing may be calculated on the basis of €190,000. The difference would have to be covered using your own funds.

Therefore, 100% financing does not necessarily mean that you can buy a home without any savings. There may also be costs related to the appraisal, the deed, property registration, insurance, and other expenses associated with the purchase.

Public assurance does not mean automatic approval

Meeting the requirements for the public guarantee does not mean that the bank is obliged to approve your mortgage application.

The bank will still assess the buyer’s financial situation to ensure that the mortgage payments are affordable. It will consider factors such as income, job stability, other existing loans, age, the repayment term, and credit history.

For example, a person with several personal loans or a large monthly car loan payment may have a lower borrowing capacity than someone with the same salary but no other debts.

Each bank carries out its own assessment, so the conditions and loan amount offered may vary between institutions.

Tax exemption for young people: IMT Jovem

In addition to the public guarantee, there is another important benefit for young people buying their first home in Portugal: IMT Jovem

This is a tax benefit for people aged 35 or under who purchase their first property as their primary and permanent residence.

The benefit may provide a full or partial exemption from two taxes associated with the purchase:

• IMT – Municipal Property Transfer Tax (Imposto Municipal sobre as Transmissões Onerosas de Imóveis)
• Stamp Duty on the property purchase (Imposto do Selo)

In mainland Portugal, the 2026 IMT thresholds provide a full exemption for eligible young buyers up to the applicable limit, followed by a partial exemption for higher-value properties.

Therefore, the same person may benefit from both the public guarantee, which can make higher financing possible, and the IMT Jovem tax exemptions, provided the requirements for each measure are met.

It is important to keep in mind that these tax benefits do not mean there are no other costs involved in purchasing a property. Costs related to the deed, registration, appraisal, insurance, and the loan itself may still apply.

How to apply for a home loan in Portugal step by step

Although each mortgage application may be different, the process normally follows a series of steps.

1. Find out how much you may be able to borrow

Before you start looking for a home, it is advisable to have an idea of how much a bank may be willing to lend you. This is usually assessed based on your income, employment status, existing loans, and available savings. Ideally, you can contact a credit intermediary, who will request the necessary documents, obtain mortgage proposals from different banks, compare the available options, and help negotiate the conditions on your behalf. This service is free of charge and without obligation.

Contact one of our trusted credit intermediaries for a free mortgage simulation

This allows you to set a realistic budget for your property search.

For example, if the initial assessment shows that you may be able to buy a property worth up to approximately €220,000, you can focus your search on properties within that range and avoid wasting time visiting homes outside your realistic budget.

2. Find a property

Once you know the budget, you can start looking for a suitable property.

When you find a property that interests you, you will need to provide the bank with information and documentation about it so that the bank can assess the transaction.

In many cases, a CPCV – Contrato-Promessa de Compra e Venda (Promissory Purchase and Sale Agreement) is signed before the final deed, usually accompanied by a deposit.

That is why it is important not to commit a significant amount of money without first having a clear idea of whether your financing is likely to be approved.

3. Apply for the loan and submit the documentation

The next step is to submit the mortgage application.

The bank will typically request personal and financial documents such as:

• an identity document;
• NIF;
• recent payslips;
• employment contract;
• IRS tax return;
• IRS tax assessment notice (nota de liquidação);
• bank statements;
• information about other loans.

If you are self-employed, own a business, or receive income from abroad, the bank may request additional documentation.

Being self-employed and issuing recibos verdes (“green receipts”), or being a foreign national, does not prevent you from applying for a mortgage, although the bank may carry out a more detailed assessment of your income and its consistency over time.

4. The bank assesses your financial profile

Once the documentation has been received, the bank assesses the borrowing capacity of the applicants.

At this stage, the bank reviews income, expenses, other loans, and whether the applicants can comfortably afford the future mortgage payments.

If the financial profile is considered viable, the process can move on to the assessment of the property itself.

5. Property appraisal

The bank will request a professional appraisal of the property. This appraisal is important because it helps determine the maximum amount the bank may be willing to lend.

As explained above, if the price agreed with the seller is higher than the bank’s appraisal value, you may need to use your own funds to cover the difference.

6. Final mortgage approval

If both the financial profile and the property meet the bank’s requirements, the mortgage can receive final approval.

The client receives the final loan offer containing the applicable terms and conditions and has time to review it before signing.

There is a mandatory minimum seven-day cooling-off period between receiving the binding offer and signing the mortgage agreement.

7. Signing the deed and receiving the property

The final step is signing the property purchase deed and the mortgage agreement.

At that point, the purchase is formalized, the bank releases the mortgage funds, and the property officially becomes the buyer’s property.

After completion, the borrower begins making the agreed monthly mortgage payments.

Before you start looking for a home: get a mortgage simulation

One of the most common mistakes is to start viewing properties without knowing how much the bank may actually be willing to lend.

Before starting the search, a simulation allows you to get an initial idea of:

• the approximate property purchase budget;
• the amount that could be financed;
• the estimated mortgage payment;
• whether you may meet the requirements for the public guarantee;
• how much of your own money might be needed.

At Hola Portugal we collaborate with a credit specialist who can assess your individual situation and help you compare different mortgage options.

How long does the whole process take?

There is no exact timeframe because it depends on the bank, the documentation, the property, and how smoothly each stage of the process progresses.

As a reference, a study published in 2026 on credit intermediation in Portugal found that most transactions were completed within 31 to 60 days from the beginning of the process to the signing of the deed, although a significant proportion took between 61 and 90 days.

Therefore, as a general guideline, it is reasonable to allow approximately one to two months, provided the documentation is complete and no complications arise. The process may take longer if documents are missing, there are issues with the appraisal, the applicant has a more complex employment or financial situation, or proposals from several banks need to be assessed.

Buying a home with a partner

It is possible for two people to apply for a mortgage and purchase a property together.

Under the public guarantee scheme for young people, if both people are listed as buyers, they must also be borrowers and must meet the eligibility requirements. Therefore, if, for example, one person is 30 and the other is 38, the situation should be assessed before assuming that the transaction will qualify for the public guarantee.

The situation may also vary depending on who will own the property, the buyers’ marital status, and their matrimonial property regime.

How long is the public guarantee scheme available?

Under the rules in force in September 2026, eligible mortgage agreements must be signed by December 31, 2026 in order to benefit from the public guarantee.

The measure remains in effect, and in April 2026, the Portuguese government announced an additional €750 million in guarantees, bringing the total amount allocated to the scheme to €2.3 billion. More than 25,000 mortgages had already been formalized under the scheme during 2025.

Frequently asked questions about Crédito Habitação Jovem

I am 35 years old. Can I apply for the public guarantee?

Yes. The public guarantee is available to eligible applicants aged 35 or under. For the separate IMT Jovem tax benefit, the relevant age is the buyer’s age on the date ownership of the property is transferred.

Does the Portuguese government pay for part of my home?

No. The State guarantees part of the mortgage, but the buyer remains responsible for repaying the full loan amount.

Can I really get 100% financing?

Potentially, yes, provided the bank approves the mortgage. Financing is calculated based on the lower of the purchase price and the bank’s appraisal value.

Can I apply for the mortgage if I am a foreigner?

Yes. Being a foreign national does not, by itself, prevent you from applying for a mortgage in Portugal. To benefit specifically from the public guarantee, you must have tax residence in Portugal and meet the other eligibility requirements.

Can I apply if I am self-employed and issue recibos verdes?

Yes. The bank will assess your income and its stability over time and may request additional documentation.

Can I use the public guarantee to buy a home that I plan to rent out?

No. The property must be your first primary and permanent residence.

Can I also benefit from IMT Jovem?

Yes. The public guarantee and IMT Jovem tax benefits are separate measures and may be used together, provided you meet the requirements for each.

Official sources

The information in this guide is based on the rules in force as of September 2026 and on information published by the Banco de Portugal (Bank of Portugal), Autoridade Tributária e Aduaneira (Portuguese Tax Authority), and the Portuguese government.

Rules, eligibility requirements, and public schemes may change, so we recommend checking the regulations in force at the time you apply for a mortgage or purchase a property.